4 major problems solved by SOP’s (Standard Operating Procedures)
- Dependency on an employee for certain knowledge intensive tasks i.e. MIS, Taxation etc.
- No reference material to train a new employee and also for an (Internal) Auditor to audit
- Regular delays and errors in accounting transactions
- Huge delays in ERP implementation and issues with effective utilization of it’s functionalities
What is SOP?
As the name suggests, there is a standard way of doing any work and if the work is done in that manner, the outcome is usually predictable and measurable. It enhances the overall effectiveness of any process and monitoring cost gets reduced drastically.
Deliverables of our SOP service:
Our deliverables for this exercise will comprise of following documents in physical and soft copy format for all the above-mentioned processes:
- Detailed Flow charts
The flow charts will answer four basic questions: What (description of work) needs to be done, How (methodology to do the work) it needs to be done, When (timing) it should be done and by Whom (responsibility) it needs to be done.
- Checklist & templates
The checklist will include the How to part of an activity/task so that accuracy in transaction processing can be ensured on a consistent basis and an audit trail can be maintained to trace back the route cause of error, if any.
The templates will help in standardizing the formats of information capturing and reporting at various stages of transaction processing.
- Job description of various roles
In a simple format, we’ll document the detailed job description of employees engaged in various processes. It will help in understanding the real workload and efficiency of employees, which will further help in restructuring of team/tasks.
- Activity calendar
There are many recurring tasks in a month/quarter handled by each employee in the Finance & Accounts team. We’ll map these recurring tasks in a date calendar format for reference and then also map it on Google calendar. The biggest benefit of mapping on Google calendar is getting free reminder through SMS facility.
- Delegation of authority
Communication gap creates most of the problem in the organization. Not having a formal delegation of authority is one such biggest communication gap in many organizations. In addition to slow down of processes, it creates internal control risk. We’ll create a formal Delegation of Authority for VCPL.
- Document tracker
Finance & Accounts department needs to track the status of various transactions related to different processes. For example, Status of “C” and “F” forms, Status of bills not entered in the Tally, Status of bills with other departments but not submitted to accounts department, Status of insurance policies, status of agreements etc.
We’ll create the tracker for capturing the status of important processes. Further, we’ll create this tracker on Google Sheet, which can be shared with the relevant people through edit/view rights, as required. It will create a very strong audit trail of all the changes happening over a period of time and at the same dependency on employee will get reduced significantly.
- Statutory compliance calendar
This calendar will capture the current status of all the applicable statutory compliances applicable on the company.
- Monitoring mechanism of accounting team
In a big team set up (of more than 5 employees) in Finance & Accounts function, it becomes very difficult to track the performance of each employee at a regular level. This is one of the most powerful (yet highly simple) mechanism/tools created by us. We have tested it with in our company and using it successfully from more than 2 years now.
- We’ll follow this execution strategy for creating SOP’s, which may change after start of work:
- Signing of a formal Agreement and a NDA (non disclosure agreement)
- Understanding of Business and role of F&A as a support function
- Review the existing systems and processes through any material which is readily available
- Discuss with each team member to understand the flow of activities carried by them
- Go through the accounting flow of transactions on Accounting software
- Document the systems and processes and share the first draft with respective team member
- Incorporate the changes after discussion and take their sign offs
- Submit the final compilation for review and make necessary changes if required
The biggest challenge before any organization, in relation to SOP’s, lies in it’s implementation. We’ll make sure that the implementation of the SOP’s happens by deputing a full time person/team for a certain period of time as agreed.